The Swiss machinery, electrical equipment and metal (MEM) industry felt the slowdown in global economic conditions in 2019. If the effects of the coronavirus epidemic and the strength of the franc persist, the situation will become critical, fears the professional association.
Last year, MEM companies suffered a 10.6% drop in order intake, Swissmem announced on Wednesday. Turnover has decreased by 4.5% compared to the previous year. The erosion of sales was more marked for large companies than for SMEs.
To explain these declines, laziness cites the economic slowdown in the main markets, triggered by trade conflicts and difficulties in the automotive sector.
The strength of the franc has also hampered the competitiveness of Swiss companies in the large euro area.
Global economic climate affects
Exports fell 2.1% to 68.3 billion francs. The falls were significant in neighboring countries such as Italy (-11.4%), Germany (-6.4%) and France (-5.9%). Shipments to Asia (-1.7%) also retracted, the reverse of those to the United States (3.5%).
The negative development of business had an impact on the use of capacities: the rate fell in the fourth quarter 83.0% against 91.6% a year earlier. This is below the long term average of 86.4%.
The number of employees also fell by 2,300 people in the last part of 2019, 324,600 employees. This trend is likely to worsen due to partial unemployment and restructuring measures, warns Swissmem.
The coronavirus epidemic affects the world economy, underlines the fatire. Swiss companies have seen their supply chains suffer or even be interrupted.
Swissmem is also calling for rapid ratification of the free-trade agreements with Indonesia and Mercosur.
(nxp / ats)
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